Slump in Domestic Market Creates High Inventory Level of Butadiene for OPAL

ONGC Petro Additions Limited (OPaL) is one of the leading players in India’s Polymer market having production capacities for Polymers such as HDPE, LLDPE, PP and Chemicals such as Benzene, Butadiene, Carbon Black Feedstock (CBFS) and Pygas. However, due to the ongoing slowdown in automotive sector, OPAL has an excess of Butadiene in inventory. To liquefy the existing inventory levels, the company has slashed Butadiene price to the levels of USD 800 per MT, a drop by almost 15 per cent over the previous month. Butadiene finds extensive application in polymer and elastomers such as Styrene Butadiene Rubber (SBR), Polybutadiene Rubber (PBR), Acrylonitrile Butadiene Styrene (ABS), and Styrene Butadiene latex. Since SBR and PBR are primarily used in the production of tires, sluggish demand from automotive OEMs and ancillary industries has led to significant drop in Butadiene demand, resulting in build-up of butadiene inventory.